Why financial crime detection and prevention matters

 *This story is part of a new ACFCS initiative to tell some of the real stories and share some of the victories, large and small, that go on behind the scenes in compliance departments, companies and law enforcement to illustrate why financial crime detection and prevention programs matter.

Submitted by Ashton Laurent, Ph.D.
Associate/Assistant Vice President
Compliance Division for the Americas
Mitsubishi UFJ Financial Group

This is a two-pronged story – one about Privacy and one about detecting Theft and Corruption:

Years ago, my husband, Tony, was a turnaround specialist for a venture capital company. They bought companies that were in trouble and made them profitable again.

They had bought a company that made glass for armored cars for diplomats and high-ranking officials all over the world and should have been wildly successful. However, they were losing money – lots of money. The venture capital company that bought them sent in four accountants to monitor the books. No one could find anything.

My husband talked with the new owners and said, “Send me in as a janitor.”

So, they made a background for him as a janitor and he got the job. He went in and was friendly with everyone. This was normal for him because he was the kind of person who people talked to. In fact, he was such a good listener that people would tell him every detail of their lives.

He went to the office in his oldest clothes, a stinky Guinea cigar, and a thick Italian accent. He emptied trash, cleaned bathrooms, cleaned offices – and listened while people talked around him as if he didn’t exist.

After all, he was “just a janitor,” barely literate, and they could say anything around him. After work, he would go through the papers in the trash to see what was there. The president of the company told him, “Tony, my office has never been so clean. You’re doing a great job!”

It took Tony only a few days.

He listened in on a conversation in the president’s office between him and the controller, where they described changing the invoices for the expensive glass and putting it on the books as regular glass. Then, they would pocket the difference.

The next day, the president came into his office and found Tony sitting behind his desk in a coat and tie. He laughed and said, “So, you want my job?”

Tony said in his regular, educated voice, “Sit down. I’m from Home Office.”

The president of the company turned white and almost passed out.

Since this was not a publicly owned company, my husband was able to work it out with them to repay the money and not go to prison.

If this had been a publicly owned company – and perhaps in today’s world, they would have suffered much more humiliation. As it was, they lost their jobs and repaid the money, but they did not have to suffer the shame of a trial and imprisonment.

This illustrates several rules that you need to follow in compliance:

1. Check out all your employees’ backgrounds carefully. Don’t imagine that just because they are “cleaning” or “service” people that you can skip this step.

2. DO NOT TALK in front of anyone who is not a part of your trusted office group. SHRED confidential documents. LOCK your computer when you step away.

3. Stealing is always wrong.

4. KARMA works. The theft and corruption that the president and controller perpetrated went on for a very long time. Of course, by weakening the company, they left it open to a sale and thus, to the eventual disclosure of their wrongdoing.